Much of the process for gifting a vehicle is the same as the buying process in Tennessee, except the circumstances are usually way more exciting! Receiving a vehicle as a gift can be the highlight of the recipient's year! Don’t put a damper on the celebration with improper paperwork.

The all-around car experts at

Jerry

are here to give you a full walkthrough on how to properly and legally transfer the title of a vehicle as a gift in Tennessee. We will cover the basics on car gifting, how to avoid excess costs, and how to fill out the proper paperwork.

How to buy a car as a gift in Tennessee

If you're going to give someone a brand new car, it’s better to involve them in the car buying process. This not only ensures they get the car of their dreams, but it also opens up your financing options.

In regards to financing, you can not transfer the title of a vehicle you do not already own. In order to do a full-on surprise, you’ll have to pay for the vehicle in full or put the car in your name.

Liens

or car loans cannot be outstanding for you to

transfer a title

One of your best options is to involve the recipient and have them cosign on a loan. Your gift can be taking the responsibility for the loan. The recipient's name just has to be involved if you want them to own the gift—even partially. Ask your local dealership for more information on this route.

Key Takeaway Involving the recipient of the gift in the shopping process makes the paperwork easier and opens the door to alternative financing options.

MORE:

Car Loan in Tennessee 2022

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How to gift a used car in Tennessee

Gifting a used car can sometimes be more memorable than any new car could ever be. Some common circumstances are a teenager’s first car, a kind gesture to a loved one, or continuing a family tradition.

Whatever your circumstances are, let’s make sure you're prepared before you head to your local Tennessee Vehicle Services Division (DVS) office.

Negotiate the terms of the gift with your recipient

To process a vehicle transfer successfully, there are some fees that need to be paid. Make sure you have a plan on who is going to cover the costs of the transfer.

Here’s a table of the costs you should discuss with your recipient:

Cost	Tennessee average
$11	Title fee
$1	Title transfer fee
$26	License plate fee
Varies	Gift tax

While sales tax is voided due to zero dollars being transacted, there could be a gift tax as well. The transferor may have to pay this tax if the car’s fair market value surpasses $15,000 as of 2020. Additional fees may vary by county.

Now that all the transfer expenses are accounted for, it’s also important to think of the big picture. Can the recipient of the gift afford the long-term costs of owning a vehicle, like fuel, maintenance, and insurance? If the answer is no, it may be better to hold off on the gift and help out in other ways.

Record of the gift with a bill of sale

Now that the terms of your gift have been negotiated, it’s time to put pen to paper. While a bill of sale isn’t legally required in the Tennessee title transfer process, it’s still a good document to construct.

A bill of sale serves as an official document for the transaction, it can be referenced in any legal or financial disputes about the title transfer.

Transfer the vehicle title

The passing of the torch—transferring the vehicle title—is the last step in the gift-giving process. Here are the documents you need to complete to execute the transfer at a Tennessee DVS office:

Complete the TN vehicle title assignment (both parties must sign the title certificate)

Indicate “0” in the price section of the vehicle’s title

Present valid form of ID to validate residency

Complete an

Odometer Disclosure Statement

(

Form RV1317001

)

Complete an Affidavit of Non-Dealer Transfers of Motor Vehicles (

Form RV-F1301201

)

Smog emissions checks may vary by county and vehicle type

Pay the aforementioned fees

Once the vehicle is transferred, your gift is fully unwrapped! The recipient is now legally the owner of the vehicle.

Purchase Tennessee liability insurance—or full coverage

Make sure you have a plan for the recipient to have car insurance before they hit the road as the new owner. It’s illegal to operate a vehicle in Tennessee with a minimum amount of

liability coverage

. We recommend getting a

full coverage policy

in order to protect your vehicle from a wide range of circumstances.

MORE:

How to choose the best car for a teenager

How to find affordable car insurance in Tennessee

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